Pampa de Pongo

The property consist of 8 mining concessions covering 15,300 ha and is located the coastal region of southern Peru, approximately 400 km south of Lima.

Deep sea port facilities are located approximately 42 km to the northwest at Puerto San Nicolas, and approximately 38 to the west-northwest in San Juan. San Juan is a deep-water port on the Pacific coast of Peru and is about to be expanded. The Pan American Highway traverses the western boundary of the property.

Pampa de Pongo is a world-class magnetite deposit, with Inferred Resources of 750Mt at a grade of 41.7% iron (Fe), 0.093% copper (Cu) and 0.059 g/t gold (Au) defined in the Central Zone alone. According to Rio Tinto, the Marcona and Pampa de Pongo deposits are the largest iron accumulations with associated copper and gold along the western coast of South America.

Cardero has acquired a 100% interest in the Pampa de Pongo project from Rio Tinto Mining and Exploration Ltd.

The project would be developed as a 75,000 tonne/day underground block caving operation.

Ore would be crushed and ground, with an iron concentrate produced through wet magnetic separation, and a copper-gold by-product concentrate produced through flotation.

The iron concentrate would be converted into iron pellets at the port site.

Upon reaching full planned production, Pampa de Pongo would produce 15 million tonnes of iron ore pellets per year (a total of 330Mt of blast furnace pellets grading 64.5% iron, 535 million pounds of copper and 493,000 ounces of gold through current proposed life of mine), which would be available for Asian markets.

An existing electrical transmission line traverses the property and it would need upgrading as to be able to satisfy future mine's requirements.